By Victor Ahiuma-Young

The National Pension Commission PenCom, has   given insight into why it launched a new Pension Contribution Remittance System designed to optimise the process of remitting pension contributions into employees’ Retirement Savings Accounts, RSAs.

The platform developed in partnership with the Pension Operators’ Association of Nigeria, PenOp, has approved Payment Solution Service Providers, PSSPs, to enhance accuracy, efficiency, and transparency in pension contributions.

Giving details of the new system, the Commission explained that the introduction of the Pension Contribution Remittance System is a response to the challenges frequently encountered by employers, including errors in contribution schedules and verification delays.  

In a statement, Pencom said in the past, it identified a challenge of uncredited pension contributions, primarily due to incomplete documentation from employers, which resulted in Pension Fund Administrators, PFAs, being unable to credit the RSAs of affected employees.

It expressed concerns about the huge number of uncredited pension contributions in PFAs’ accounts.  

The Commission advocated the need for strict compliance from employers and contributors to address this matter promptly.  

According to PenCom, the   inability of PFAs to credit employees’ RSAs could potentially affect their retirement plans.  

The commission said  it was critical to act quickly to correct the situation, saying “By completely automating pension remittance processes, PenCom and PenOp have taken significant steps towards creating a more robust Contributory Pension Scheme, CPS, for employers and employees, solving the challenge of uncredited pension contributions in the accounts of PFAs.  

“By this development, all employers are to channel all pension contributions through the approved PSSPs, who then validate the PFAs and Personal Identification Numbers (PINs) of the RSA holders with PenCom’s database to eliminate errors, which led to uncredited pension contributions.”